Taxes Consolidation Act 1997 section 550

Assets disposed of in series of transactions

Section 550 prevents the artificial reduction of capital gains tax by splitting assets between connected persons through a series of separate transactions.

• Where assets are worth more collectively than individually, and are disposed of separately to connected persons, the aggregate market value of the assets as a group is used for CGT purposes.
• The higher collective value is apportioned rateably across the individual disposals, so each transaction is treated as a disposal at its proportionate share of the total value.
• This is an anti-avoidance measure targeting schemes where property is broken into parts and transferred separately so that the sum of the individual values is less than the value of the whole.
• The section supplements the general market value rule in section 549, which would not on its own catch a series of disposals where each individual part is sold at its standalone market value.